Bill Text: MN SF1276 | 2013-2014 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Mortgage foreclosures provisions modifications; lenders and servicers loss mitigation requirements
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Passed) 2013-05-24 - Secretary of State Chapter 115 [SF1276 Detail]
Download: Minnesota-2013-SF1276-Introduced.html
Bill Title: Mortgage foreclosures provisions modifications; lenders and servicers loss mitigation requirements
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Passed) 2013-05-24 - Secretary of State Chapter 115 [SF1276 Detail]
Download: Minnesota-2013-SF1276-Introduced.html
1.2relating to real estate; requiring loss mitigation by mortgage lenders and
1.3servicers;amending Minnesota Statutes 2012, sections 580.02; 580.041,
1.4subdivisions 1b, 1c, 2a.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 580.02, is amended to read:
1.7580.02 REQUISITES FOR FORECLOSURE.
1.8 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
1.9this subdivision have the meanings given them.
1.10(b) "Foreclosing party" means any entity that is foreclosing a residential mortgage
1.11in any manner permitted by law.
1.12(c) "Loss mitigation obligations" means each and every required action to be taken
1.13by a residential mortgage servicer, lender, mortgagee, note owner, note holder, or any other
1.14person or entity in connection with a residential mortgage loan to review and consider
1.15the homeowner for a loan modification or other relief which will allow the homeowner to
1.16retain ownership of the property.
1.17(d) "Required action" means an action required under:
1.18(1) any applicable statute or rule;
1.19(2) any regulation, guidance, directive, or other publication issued by a federal
1.20agency or government-sponsored enterprise; or
1.21(3) any consent, settlement, or other legal agreement.
1.22 Subd. 2. Generally applicable requisites. To entitle any foreclosing party to make
1.23such a foreclosure described in section 580.01, it is requisite:
2.1 (1) that some default in a condition of such mortgage has occurred, by which the
2.2power to sell has become operative;
2.3 (2) that no action or proceeding has been instituted at law to recover the debt then
2.4remaining secured by such mortgage, or any part thereof, or, if the action or proceeding
2.5has been instituted, that the same has been discontinued, or that an execution upon the
2.6judgment rendered therein has been returned unsatisfied, in whole or in part;
2.7 (3) that the mortgage has been recorded and, if it has been assigned, that all
2.8assignments thereof have been recorded; provided, that, if the mortgage is upon registered
2.9land, it shall be sufficient if the mortgage and all assignments thereof have been duly
2.10registered; and
2.11 (4) before the notice of pendency as required under section580.032 is recorded, the
2.12party has complied with section580.021 .
2.13 Subd. 3. Requisites applicable to certain foreclosing parties. No foreclosing
2.14party may publish or serve a notice of sale under section 580.03 until all loss mitigation
2.15obligations relevant to the mortgage loan being foreclosed have been fully satisfied.
2.16 Sec. 2. Minnesota Statutes 2012, section 580.041, subdivision 1b, is amended to read:
2.17 Subd. 1b. Form and delivery of foreclosure advice notice. The foreclosure advice
2.18notice required by this section must be in 14-point boldface type and must be printed on
2.19colored paper that is other than the color of the notice of foreclosure required by sections
2.20580.03
and
580.04 and the notice of redemption rights required by this section, and that
2.21does not obscure or overshadow the content of the notice. The title of the notice must
2.22be in 20-point boldface type. The notice must be on its own page. The foreclosure
2.23advice notice required by this section must be delivered with the notice of foreclosure
2.24required by sections580.03 and
580.04 . The foreclosure advice notice required by this
2.25section also must be delivered with each subsequent written communication regarding the
2.26foreclosure mailed to the mortgagor by the foreclosing party up to the day ofredemption.
2.27A foreclosing mortgagee will be deemed to have complied with this section if it sends
2.28the foreclosure advice notice required by this section at least once every 60 days during
2.29the period of the foreclosure process the foreclosure sale. The foreclosure advice notice
2.30required by this section must not be published.
2.31 Sec. 3. Minnesota Statutes 2012, section 580.041, subdivision 1c, is amended to read:
2.32 Subd. 1c. Form and delivery of notice of redemption rights. The notice of
2.33redemption rights required by this section must be in 14-point boldface type and must be
2.34printed on colored paper that is other than the color of the notice of foreclosure required by
3.1sections580.03 and
580.04 and the foreclosure advice notice required by this section, and
3.2that does not obscure or overshadow the content of the notice. The title of the notice must
3.3be in 20-point boldface type. The notice must be on its own page. The notice of redemption
3.4rights must be delivered with the notice of foreclosure required by sections580.03 and
3.5580.04
and with each subsequent written communication regarding the foreclosure mailed
3.6to the mortgagor by the foreclosing party up to the day the redemption period expires. The
3.7notice of redemption rights required by this section must not be published.
3.8 Sec. 4. Minnesota Statutes 2012, section 580.041, subdivision 2a, is amended to read:
3.9 Subd. 2a. Content of notice of redemption rights. The notice of redemption rights
3.10required by this section must appear substantially as follows:
3.11"What Happens After the Foreclosure Sale
3.12After the sheriff's sale, you have the right to "redeem." Redeem means that you pay the
3.13amount bid for your house at the sheriff's sale, plus interest and costs, to keep your house.
3.14You can keep living in your home for a period of time after the foreclosure sale. This is
3.15called a "redemption period." The redemption period is [insert number of months] months
3.16after the sheriff's sale.
3.17At the end of the redemption period, if you do not redeem or sell, you will have to
3.18leave your home. If you do not leave, the person or company that bid on your home at the
3.19sheriff's sale has the right to file an eviction against you in court.
3.20Be Careful of Foreclosure Scams
3.21Be careful! After the foreclosure sale, people may approach you to buy your house
3.22or ask you to transfer your house to them for little or no money.
3.23Before you give up the rights to your house or sign any documents (including a
3.24deed), be sure you know how much the house sold for at the sheriff's sale and decide if
3.25you can save the house by paying the amount of the bid, plus interest and costs.
3.26How to Find Out How Much Your House Sold For at the Foreclosure Sale
3.27The amount you need to pay to redeem your house may be less than the amount you
3.28owed on the mortgage before the sale. You can learn what this amount is (and who the
3.29winning bidder at the sale was) by attending the sheriff's sale or by contacting the sheriff's
3.30office after the sale.
3.31You Can Also Sell Your House
3.32During the redemption period, if you sell your home, you must sell it for enough
3.33to pay off the winning bidder from the sheriff's sale and pay interest, fees, and other
3.34claims against the property. If there is any money left from the sale of the house after all
3.35these debts are paid, you can keep the money. You can also enter into a "short sale." A
4.1short sale is an agreement in which the lender agrees to accept less than the full amount
4.2you owe on the mortgage.
4.3Get More Information and Advice
4.4For more information and advice, contact an attorney or a mortgage
4.5foreclosure prevention counselor. You can find a mortgage foreclosure
4.6prevention counselor by contacting the Minnesota Home Ownership Center
4.7at 651-659-9336 or 866-462-6466 or www.hocmn.org or contact the United
4.8States Department of Housing and Urban Development at 1-800-569-4287 or
4.9www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search=MN#searchArea
4.10 www.hud.gov to get the phone number and location of the nearest certified counseling
4.11organization."
4.12 Sec. 5. EFFECTIVE DATE.
4.13Sections 1 to 3 are effective for foreclosures commenced on or after August 1, 2013.
4.14Section 4 is effective the day following final enactment.
1.3servicers;amending Minnesota Statutes 2012, sections 580.02; 580.041,
1.4subdivisions 1b, 1c, 2a.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 580.02, is amended to read:
1.7580.02 REQUISITES FOR FORECLOSURE.
1.8 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
1.9this subdivision have the meanings given them.
1.10(b) "Foreclosing party" means any entity that is foreclosing a residential mortgage
1.11in any manner permitted by law.
1.12(c) "Loss mitigation obligations" means each and every required action to be taken
1.13by a residential mortgage servicer, lender, mortgagee, note owner, note holder, or any other
1.14person or entity in connection with a residential mortgage loan to review and consider
1.15the homeowner for a loan modification or other relief which will allow the homeowner to
1.16retain ownership of the property.
1.17(d) "Required action" means an action required under:
1.18(1) any applicable statute or rule;
1.19(2) any regulation, guidance, directive, or other publication issued by a federal
1.20agency or government-sponsored enterprise; or
1.21(3) any consent, settlement, or other legal agreement.
1.22 Subd. 2. Generally applicable requisites. To entitle any foreclosing party to make
1.23
2.1 (1) that some default in a condition of such mortgage has occurred, by which the
2.2power to sell has become operative;
2.3 (2) that no action or proceeding has been instituted at law to recover the debt then
2.4remaining secured by such mortgage, or any part thereof, or, if the action or proceeding
2.5has been instituted, that the same has been discontinued, or that an execution upon the
2.6judgment rendered therein has been returned unsatisfied, in whole or in part;
2.7 (3) that the mortgage has been recorded and, if it has been assigned, that all
2.8assignments thereof have been recorded; provided, that, if the mortgage is upon registered
2.9land, it shall be sufficient if the mortgage and all assignments thereof have been duly
2.10registered; and
2.11 (4) before the notice of pendency as required under section
2.12party has complied with section
2.13 Subd. 3. Requisites applicable to certain foreclosing parties. No foreclosing
2.14party may publish or serve a notice of sale under section 580.03 until all loss mitigation
2.15obligations relevant to the mortgage loan being foreclosed have been fully satisfied.
2.16 Sec. 2. Minnesota Statutes 2012, section 580.041, subdivision 1b, is amended to read:
2.17 Subd. 1b. Form and delivery of foreclosure advice notice. The foreclosure advice
2.18notice required by this section must be in 14-point boldface type and must be printed on
2.19colored paper that is other than the color of the notice of foreclosure required by sections
2.21does not obscure or overshadow the content of the notice. The title of the notice must
2.22be in 20-point boldface type. The notice must be on its own page. The foreclosure
2.23advice notice required by this section must be delivered with the notice of foreclosure
2.24required by sections
2.25section also must be delivered with each subsequent written communication regarding the
2.26foreclosure mailed to the mortgagor by the foreclosing party up to the day of
2.27
2.28
2.29
2.30required by this section must not be published.
2.31 Sec. 3. Minnesota Statutes 2012, section 580.041, subdivision 1c, is amended to read:
2.32 Subd. 1c. Form and delivery of notice of redemption rights. The notice of
2.33redemption rights required by this section must be in 14-point boldface type and must be
2.34printed on colored paper that is other than the color of the notice of foreclosure required by
3.1sections
3.2that does not obscure or overshadow the content of the notice. The title of the notice must
3.3be in 20-point boldface type. The notice must be on its own page. The notice of redemption
3.4rights must be delivered with the notice of foreclosure required by sections
3.6to the mortgagor by the foreclosing party up to the day the redemption period expires. The
3.7notice of redemption rights required by this section must not be published.
3.8 Sec. 4. Minnesota Statutes 2012, section 580.041, subdivision 2a, is amended to read:
3.9 Subd. 2a. Content of notice of redemption rights. The notice of redemption rights
3.10required by this section must appear substantially as follows:
3.11"What Happens After the Foreclosure Sale
3.12After the sheriff's sale, you have the right to "redeem." Redeem means that you pay the
3.13amount bid for your house at the sheriff's sale, plus interest and costs, to keep your house.
3.14You can keep living in your home for a period of time after the foreclosure sale. This is
3.15called a "redemption period." The redemption period is [insert number of months] months
3.16after the sheriff's sale.
3.17At the end of the redemption period, if you do not redeem or sell, you will have to
3.18leave your home. If you do not leave, the person or company that bid on your home at the
3.19sheriff's sale has the right to file an eviction against you in court.
3.20Be Careful of Foreclosure Scams
3.21Be careful! After the foreclosure sale, people may approach you to buy your house
3.22or ask you to transfer your house to them for little or no money.
3.23Before you give up the rights to your house or sign any documents (including a
3.24deed), be sure you know how much the house sold for at the sheriff's sale and decide if
3.25you can save the house by paying the amount of the bid, plus interest and costs.
3.26How to Find Out How Much Your House Sold For at the Foreclosure Sale
3.27The amount you need to pay to redeem your house may be less than the amount you
3.28owed on the mortgage before the sale. You can learn what this amount is (and who the
3.29winning bidder at the sale was) by attending the sheriff's sale or by contacting the sheriff's
3.30office after the sale.
3.31You Can Also Sell Your House
3.32During the redemption period, if you sell your home, you must sell it for enough
3.33to pay off the winning bidder from the sheriff's sale and pay interest, fees, and other
3.34claims against the property. If there is any money left from the sale of the house after all
3.35these debts are paid, you can keep the money. You can also enter into a "short sale." A
4.1short sale is an agreement in which the lender agrees to accept less than the full amount
4.2you owe on the mortgage.
4.3Get More Information and Advice
4.4For more information and advice, contact an attorney or a mortgage
4.5foreclosure prevention counselor. You can find a mortgage foreclosure
4.6prevention counselor by contacting the Minnesota Home Ownership Center
4.7at 651-659-9336 or 866-462-6466 or www.hocmn.org or contact the United
4.8States Department of Housing and Urban Development at 1-800-569-4287 or
4.9
4.10 www.hud.gov to get the phone number and location of the nearest certified counseling
4.11organization."
4.12 Sec. 5. EFFECTIVE DATE.
4.13Sections 1 to 3 are effective for foreclosures commenced on or after August 1, 2013.
4.14Section 4 is effective the day following final enactment.
